Fleet News

Lex in frame to acquire RAC

LEX Service is in acquisition mode and while that is unlikely to include the purchase of rival fleet management and leasing companies it will include 'motoring services' - possibly RAC Motoring Services. As speculation mounts as to the future ownership of RAC Motoring Services following the blocking of Cendant Corporation's bid to buy the organisation by the Department of Trade and Industry, Lex Service is believed to be one of the companies reviewing a potential purchase strike.

In announcing its 1998 results, (see below) Lex Service revealed it had a cash war chest of more than £120 million to spend on growing its motoring services. While the company traditionally never comments on speculation, it is known that when RAC Motoring Services was put up for sale last year it was interested in the organisation. However, the company believed that Cendant's £450 million bid for the company was 'over the odds'. Other names in the frame include Centrica, owner of British Gas and Goldfish financial services, venture capital groups Cinven, the Prudential's PPM Ventures arm and Schroder Ventures and GE Capital.

After the Lex Service results were announced chief executive Andrew Harrison said: 'We are looking at the RAC, but we wouldn't pay a silly price.' And a company spokesman added: 'Our name was linked to RAC Motoring Services originally. It is an attractive business. It is a motoring services business and we are looking to expand out motoring services businesses. But acquisition must be at the right price. The Cendant price was over the odds.'

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